Mod 28 Wrong Answers Flashcards Preview

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Flashcards in Mod 28 Wrong Answers Deck (17):
1

3 parties in draft

1 Drawer

2 drawee

3 payee

2

A draft is a three party instrument where a drawer...

Orders a drawee (bank) to pay a fixed amount in money to the
Payee

3

A draft is not...

Payable on demand (a check is payable on demand)

4

Blank endorsement 2

1 does not specify any endorsee

2 converts order paper to bearer paper

5

Special endorsement

Indicates the specific person to whom the endorsee wishes to negotiate the instrument

6

Use of a special endorsement converts...

The order paper into bearer paper

7

What kind of endorsement does not specify any endorsee?

Blank endorsement

8

An endorsement that indicates a specific person to whom the instrument is being negotiated is...

A special endorsement

9

Qualified endorsement

Disclaims liability by signing recourse

10

In order for an instrument to qualify as a check, the instrument must...

Be payable on demand

11

A special endorsement states...

"Pay to name"

12

"If he completes" is a phrase found in...

Found in a restrictive endorsement

13

A party who found an instrument payable to bearer is...

2) but not...

a holder

2) but not a holder in due course

14

To be a holder in due course he must...

Obtain a negotiable instrument from a holder in due course

15

When a negotiable instrument is found, it cannot be established that the...

Previous holder was a holder in due course

16

When a party receives an instrument with a notice of defense from a holder in due course, he does...2

1 Obtain the rights of a holder in due course

2 but can't be holder in due course himself because notice of
Defense

17

Draft is a...

3 party instrument

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